E Fed Tricksters, Put Your Monetarism Where Your Mouths Are

In Nevada, there is sort of a negative tax, as we have no state income tax because the casinos earn enough to pay the tax. So, elements of the plan for negative tax can be very appropriate.

Helicopter money, on the other hand, is worth implementing, in order to allow the Fed to raise interest rates. It is simply the application of base money to each person equally, within a certain time period, and with the goal of allowing interest rates to rise. It is not based on government debt.

Base money is Fed money, and if the goal is to repair the balance sheet of the Fed, helicopter money could do just that, and quickly the dent created in the balance sheet by the dispersion of trillions of dollars would be repaired by more economic activity and by more general prosperity and by higher interest rates. Monetarism would create a general prosperity but with the understanding that it was not permanent grants. Without a general prosperity, higher interest rates are a Federal Reserve night time fantasy dream.

So, if we want higher rates, and not be like Europe, and not have monetary policy reach the end of the road and fail, it is time the monetarists started acting like monetarists and back helicopter money. They should make it clear that HM is not Keynesian big government fiscal stimulus, nor is it QE, with bond swapping with the treasury, nor is it UBI!

It is time to really see if monetarists really are monetarists, if they want to follow the genius, Friedman, or if they just don't have the guts to stand for the obvious next step in monetary policy. Come on monetarists, put your monetarism where your mouths are.

I have often wondered if the Fed pumps the threat of higher interest rates to push bond yields up, giving its banks a bargain opportunity to buy! That isn't a way to run the economic system, with slight of hand parlor tricks! No, the real way to run an economy is to fix the problem of declining real rates without pushing nominal rates negative. It can be done. Friedman said so. Follow the genius, monetarists!

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Disclosure: I am not an investment counselor nor am I an attorney so my views are not to be considered investment advice.

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